Alabama Smokey Taxes

It is a neat twist of politics and
business; it is a paradox that enables the Alabama State to collect more
taxes. Interestingly, while the government in Alabama is spending more
money to discourage people from smoking, it stealthily banks on cigarette
taxes to fund its medical programs, prisons, mental health centers and
other vital organs of government.

In fact, cigarette tax is
amazingly the state third largest source of income on its general budget,
surpassing even property taxes which rank fifth. It is expected that the
state will collect approximately $182 million in cigarette taxes this
year. It is not alone, however. Georgia is poised to collect about $247
million, Florida $452 million and Michigan a whapping $1.1 billion.

Results have indicated that efforts to discourage smoking have had
little, if any effect at all, on the number of people who continues to
smoke. In 2004, the Alabama Legislature and Gov. Bob Riley past a bill
that raised taxes on cigarette from 16.5 cents a pack to 42.5 cents. This
more than double increase in cigarette taxes had no effect on the general
consumption of cigarettes in Alabama. Discouragingly, and yet,
encouragingly, about one-fourth of Alabama adults were smoking prior to
the tax hike and about the same amount after it: bad for health but good
for the public purse. In addition to the cigarette taxes that Alabama
government receives directly from smokers habit, it expects to harvest
about $94.3 million this year from tobacco companies as part and parcel of
the national tobacco settlement.

We are a tax and accounting firm in Huntsville Alabama with a strong focus on helping small businesses reduce cost associated with taxes and to assist individual maximize their tax return. Some of the accounting and tax areas in which we are profficient includes, payroll taxes, quaterly and yearly reports, estimated tax, Late Filers, financial statements, income tax return and payroll processing and general bookkeeping. We are familiar with Peachtree, Quicken, CMS and Quickbook.